28th November 2024
ASX Release
Alliance Aviation Services Limited (“Alliance”) (ASX: AQZ) Sale of 6 Airframes and 13 Engine Cores
Alliance today announces that is has executed two binding contracts, with Scissortail Aviation, LLC and Bellinger Asset Management Pty Ltd, covering the sale of six Embraer E190 airframes and one binding contract, with Airline Technical Support Caribe B.V., for the sale of 13 surplus Rolls-Royce engine cores.
Under the first two contracts Alliance will sell six Embraer E190 airframes that have been, or will be, purchased by Alliance over the next three months.
These airframes represent six of the 30 airframes previously announced under the ‘Aercap Transaction’ in February 2023. The first of the deliveries under these contracts will occur in December 2024 with all deliveries scheduled to be completed by the end of February 2025.
Four of the airframes are already owned by Alliance and two remain to be settled with Aercap in January and February 2025.
Under the airframe sale agreements, Alliance will retain ownership of the engines, undercarriage and auxiliary power unit, all of which will remain in storage in Europe, and be marketed for sale or retained for Alliance’s own internal use, if required.
Under the third contract, Alliance will sell 13 surplus, time expired and or unserviceable RollsRoyce Tay 620/650 engine cores.
Deliveries of those engine cores has begun and will be completed by February 2025.
These engine cores are surplus to requirements for the Alliance Fokker 70 and Fokker 100 fleet given the recent acquisition of serviceable engines that will replace the Rolls-Royce “Total Care” programme from 1st January 2025.
These transactions monetise significant surplus inventory holdings and also provide additional high value componentry in a “ready for sale” condition. The revenues from this activity and any future revenues from the sales of these components will be captured in Alliance’s growing Aviation Services Business Unit.
As advised in our ASX announcement of 4th September 2024, the estimated cash benefit of these sales and resulting airframe capital expenditure avoidance is between $20m and $23m with most of this appearing in Alliance’s second half of FY25 results
In addition, the cessation of the ‘Rolls-Royce Total Care’ programme reduces future annual capital expenditure by approximately $10m to $15m per annum from FY26 onwards.
